It’s Budget Time Again – Let’s See If We Can Get the Owners to Read It

[This is a re-print of a blog I did last year, from a longer article I wrote a number of years ago.  The point is still valid, even more so in these tough economic times]

One of the most common complaints about associations is that the owners don’t know how the money is being spent.   Boards typically send a spreadsheet format budget and a year-end or audited financial report, but both come with very little in the way of explanation.

The standard budget package consists of a cover letter that basically says “We did our best to keep the assessments from going up too much….please don’t hurt us, we have to pay them too”.  Attached to the cover letter is a spreadsheet that has only one number that everyone looks at and that’s the total.  Most owners can’t divide that by the number of units, months and then apply their unit’s percentage value, so their first reaction is to feel like they have to pay the lion’s share of that outrageous number.  Stop doing this.

Your budget should tell a story.  A story about why the owner made a great decision in choosing to live in your community.  And it was a great decision.

Tell them about the volume savings on items like lawn, snow, roofs, roads, etc.  Show them how cheap it is to have the grass cut by telling them what it costs them each week, don’t just tell them the total contract cost.  Tell them how wonderful it is that someone else takes care of checking things out, then finding contractors, then watching them, then checking their work…..all things they would have to do themselves if they lived in a single family home.  But they didn’t want to do those things anymore so you’ve arranged to take care of them.  What a bunch of great people you are (and the manager too, of course).

Put the numbers in the middle of paragraphs that explain them and explain in a way that means something to them.  Don’t say you’re going to spend $200,000 on roofs, tell them you’re putting a new roof on their home, without them having to do anything, for about $2,000, a fantastic savings over the normal roofing price.

You have a problem in your budget this year that caused a major increase?  Go after it right up front.  Tell them the problem, what you’re going to do to resolve it and why it’s a good thing.

Use photographs to make your points  A picture is worth a thousand words so use that digital camera that you’ve been trying to figure out.

The budget is probably the single most important letter you will send to them during the year, so spend a little time and do it right.  By the time they finish reading your budget package,, you want the owners to be saying:  “Wow, that wasn’t all that bad”.  At least they will have a much better idea of where their money is going.

To see a sample budget (PDF format)  click here


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